As word broke that the blank-check company Digital World Acquisition Corp. was combining with former President Donald Trump’s new media venture, two early investors sold their shares.
Boaz Weinstein of Saba Capital Management and Lighthouse Investment Partners, both hedge fund managers, stated they had exited without specifying a specific time or price at which they cashed out.
“I knew that selling our whole ownership of unrestricted shares was the correct thing to do for Saba,” Weinstein stated in a statement. On Thursday, the company sold.
On Friday, Lighthouse announced that it had also sold.
“Lighthouse was unaware of the anticipated merger and no longer possesses unrestricted shares of the SPAC,” according to a statement from the firm.
When investors engage in a blank-check firm, they are not permitted to know the merger target by law, therefore the relationship with Trump came as a complete surprise, according to some investors.
Following the storming of the US Capitol on Jan. 6, many on Wall Street distanced themselves from Trump.
This week, Trump Media and Technology Group and Digital World Acquisition Corp, a Special Purpose Acquisition Vehicle, announced that they will unite to become TRUTH Social, a new social media app. Trump’s firm has stated that a beta launch will take place next month, followed by a full rollout in the first quarter of 2022.
The stock soared 357 percent on Thursday and 129 percent in active trading on Friday, indicating a strong market reaction.
The blank-check company’s link with Trump provoked some reconsidering at a time when many investors are concentrating more on integrating environmental, social, and governance considerations into their investments.
“Many investors are struggling to figure out how to infuse their values into their profession. This was not a close call for us, Weinstein stated.
Weinstein refused to tell how much money he put up at the start and how much profit he gained on Thursday when the stock soared. He also wouldn’t explain how his own investors felt about the choice to quit.
Weinstein’s fund is worth about $3.5 billion, and he rose to fame by betting against the “London Whale,” a JP Morgan Chase trader. He has previously donated to Democratic candidates, including last year’s presidential campaign of Joe Biden.
Tali Farhadian Weinstein, a former federal prosecutor, ran for Manhattan district attorney this year but was defeated by Alvin Bragg in the Democratic primary. Trump is being investigated by the office.
